Illegal Cigarette Market on the Rise in Costa Rica

Costa Rica News – Loose cigarettes can be found in just about every small grocery store throughout Costa Rica.

They cost about ¢200. Of course they won’t be out on the counter and the owner will look around before taking them out of a hiding spot.

Smuggled packages are also readily available at discounted rates. Two reforms passed in 2012 accidentally favored trafficking and smuggling. The lawmakers did not envision this effect.

Seizure of illegal cigarettes in 2014 reached 33.5 million units whereas in 2012 it was just over 2 million. It is estimated that tax evasion via cigarette smuggling cost ¢20,000 million in 2014.

One in four cigarettes in the hands of Ticos is thought to be obtained through contraband. They come from China, India, Paraguay and Panama. Although contraband increased so much, the tax that caused this was effective in a way.

By nearly doubling the price of legal cigarettes the government made ¢32.177 million in 2014. This money was distributed to organizations such as the Ministry of Health, Social Security and the Institute on Alcoholism and Drug Dependence.